I'd also like to say that this also happens with churches. Every church I've enjoyed didn't own their own building. Rather, they just rented space from the local high school, etc. These groups were extremely focused on building tight-knit communities, and were pretty free to adapt to changing circumstances. Conversely, I can think of a few churches with buildings, where the primary focus of the staff was maintaining enough donations to pay the mortgage.

This sort of phenomena applies to other communities in addition to technology businesses.

Generally agreed, though I can think of one example to the contrary.

The churches that rent are usually newer and growing. The much loved idea that a startup is a better place than a well established organization works for churches too. I also heard that (IIRC) a church just about doubles in size when it gets a building. I don't know what analogue that has in the business world.

(Protip: Rent from a Catholic highschool, even if it's a Protestant church. Lower prices, smarter people.)

This is one of Parkinson’s Laws: "perfection of planned layout is only achieved by institutions on the point of collapse."

In the chapter "Plans and Plants" of "Parkinson's Law" (see http://www.amazon.com/Parkinsons-Law-Cyril-Northcote-Parkins... ) he makes the point that

"During a period of exciting discovery or progress there is no time to plan the perfect headquarters. The time for that comes later, when all the important work has been done. Perfection, we know, is finality; and finality is death."

Parkinson reviews a number of headquarters buildings: League of Nations, Pentagon, St. Peter’s Basilica, Versailles,.... He concludes that their completion marked the sunset of the organizations that they were intended to house.

Absolute rubbish. I can give you just as many anecdotes to the contrary, viz.: Microsoft, Apple, Oracle, all of whom had reasonably perfect offices two decades ago.

Sheesh. I am so SICK AND TIRED of these articles that are like, "here's my anecdote, therefore, this is proof of a general pattern that's ALWAYS true." It's like people don't even have the vaguest grasp of science. Why bother when you can tell an irrelevant story about some time you spent a lot of time arguing about carpet, and then your company went down the tubes?

Parkinson published his book in 1958 :)

One imagines that there were counterexamples even in his day, though. Can anyone think of some companies that were rising stars in 1958? Did they have nice offices?

To the extent that the organization believes that it has "arrived" and the focus shifts from customers or the people that it serves to catering to the management then a gleaming headquarters serves as an outward physical manifestation of attitudes that presage decline.

It could be that a gleaming headquarters blinds the leadership to threats and the need for continued change.

Parkinson was writing humor. There is a core of truth to his stuff, but he obviously exaggerated for effect.

Jeez, I hate this attitude... that the only way a company can succeed is if you suffer. You spend all friggin' day at the office. It doesn't have to be a coalmine for the company to succeed. On the contrary. When a startup gets to the point that it needs to recruit the top talent, it better have nice working conditions. Look at Amazon today... crappy offices, pride in using doors as desks, and huge turnover among the development staff. Where are the Amazon engineers going? Google and Microsoft.

Do you have more insight into why Amazon's turnover is so high? I'm starting there fairly soon, and things look pretty peachy on the outside, but I am aware that for some reason or another people up and leave after about 2 years.

I honestly didn't mind the office - cramped sure, no fancy furniture sure, but I'm there to work, not marvel at the finishing and grain on my desk...

I do agree though, IMHO from the article the biggest loss was putting people into their own offices - but that's a failure in planning and understanding the company's development dynamics, not necessarily in the very act of moving.

It's a trade off. The first place I worked mis-planned their moved, and was suffering the following 3.5 years to maintain profitability. The margins weren't high enough and through put did not increase enough to justify the more expensive location. I think they moved out of that location about 10 years later, when the employee base had shrunk to a quarter of the original size.

Yes, it is a single antidote, and there other complicating factors ... such as it being 2002 when the markets were already difficult.

I don't think it was about suffering so much as not thinking the move through and, more especially, in taking their eyes off of what was important.

So is it a case of "damned if you do, damned if you don't"? How do startups expand when they really have outgrown that little hole in the wall without losing the startup culture that allowed the initial success?

Is the curse of the new building unavoidable?

I think the point of the article was best summed up by:

> While our competitors furiously worked on regaining market share, we were arguing about whether the carpets should be wool or nylon. The result was not pretty.

Growth is not the killer. They moved to a nice building, failure of the business was a correlation. A mishandling of priorities was what hurt the worst.

The cultural aspect is more about attitude than space. They outgrew the attitude and paid for it. The building and the excesses it entailed were evidence of the shift in attitude, not the other way around.

The title is misleading.

The article is really about excess spending.

Yes, if you spend excessively you're damned. No, you're not damned if you don't spend excessively.

It's about more than excessive spending:

"The new building telegraphed to our employees, “We’ve arrived. We’re no longer a small struggling startup. You can stop working like a startup and start working like a big company." We started to believe that the new building was a reflection of the company’s (and our own) success. We took our eye off the business. We thought that since we in such a fine building, we were geniuses, and the business would take care of itself."

Even if you had a modest new building and didn't give every engineer his or her own office you still might observe this.

But I think probably by making a serious effort to preserve the culture and values of the company that existed pre-new-building you could avoid the "damned if you do" piece.

This is absurd:

"Now every engineer can have their own office."

NOT INEVITABLE--EXCESSIVE SPENDING

"The new building needs to reflect that we’re a successful and established company. Lets “do it right” and have a lobby and reception area that projects a professional image."

NOT INEVITABLE AND IMPLIES EXCESSIVE SPENDING

"Lets get comfortable chairs and great new desks for everyone. None of this used stuff."

NOT INEVITABLE, BLATANTLY EXCESSIVE SPENDING

"Now we can pick out carpets that look good and feel good and we can have clean walls with great artwork and murals. "

ETC

"Lets make sure that we have plenty of conference rooms. We need our own cafeteria so employees don’t have to leave the building."

ETC

You're missing my point. I definitely agree that excessive spending can be a drain and will affect corporate culture, and you've pointed out some great examples above. But I think what makes this post interesting is the fact that there might be psychological implications to moving into any larger building, even if it doesn't have tons of amenities.

On the contrary, I don't believe excessive spending was the problem - it was the fact that they were spending on things that were counterproductive to the company.

Your own office? Great on paper, and as the article points out, deadly on productivity.

There's nothing wrong with a nice lobby and reception area - it does help get business, and honestly, assuming the author is right about how well they were doing at the time, well justified.

Another point to take from the article: your engineers may know what they want, but this may not be the best for either themselves or the company (case in point: your own office).

Why shouldn't the engineers have new Aeron chairs? Software Engineers spend most of their careers sat down, so you should buy them the best damn chair you can afford, something that supports their bodies and is very comfortable.

Look at fogcreek software, they managed to move to AWESOME offices and they are still a lean company hiring great engineers who make great products.

They can have comfortable chairs. There is no reason, though, that they have to be new comfortable chairs.

It's also about bad management.

I've been through office moves as well and it's obvious that this is one of those things that can kill a project or even a while company when everybody with the best of intentions starts negotiating with everybody else over where the coffee machine goes.

And there are many other examples where if you allow open negotiations it will end in ruin. It's like management 101.

This happened to me when our company moved at the height of the 1st dot com boom and ended up burdened with space that caused us to close (rumor said about $1mill / 100 people). It certainly was months of disruption. In my neighborhood I can think of Sun, Netscape, Bay Networks and SGI that had this happen. The big move is at least an indicator to look twice.

As one who started at Netscape in 1996 and saw it through to the sale to AOL ($4B Sale, Final Day of Trading $10B) - I'll agree that the constant shuffling, moving, and campus growth was a pretty constant distraction - but what else could they do? Ton of product lines, lots of markets in the land grab, and you needed to put the people _somewhere_

I think Netscape managed their office shifts pretty well from 1996 onwards. I don't think it could have been done much better.

And, one could do worse than selling their five year old company (April 4, 1994 - sometime around April, 1999) for $10 Billion. :-)

What an excellent set of observations! I have been around and witnessed organizations going through the same mindset and pretty much watched the same tragic downfalls happen.

I personally witnessed this professionally in ministry settings as well as tech companies. Very interesting.

you stay number 1 by acting like you're number 2.